Honda offering local workers incentives to quit

Tuesday

Mar 31, 2009 at 12:01 AMMar 31, 2009 at 11:30 PM

For the first time, Honda is offering Ohio employees incentives to resign. The move, which continues the company's tradition of avoiding layoffs, is part of a wide-ranging set of cost-saving measures announced today.

For the first time, Honda is offering Ohio employees incentives to resign.

The move, which continues the company's tradition of avoiding layoffs, is part of a wide-ranging set of cost-saving measures announced today.

"Regardless of job title or level within our organization, each Honda associate will share the responsibility of doing what we must to remain competitive," said spokesman Ron Lietzke.

Among the other moves:

• Honda will cut 13 production days from May to July, reducing the number of vehicles made in North America by about 62,000. This production cut is different from past cuts in that employees will need to take vacation time or receive no pay for at least some of 13 cancelled work days. Previously, employees had the option to report for non-production duties.

• Employees who are already eligible to retire will be offered incentives to do so.

• Employee bonuses will be sharply reduced and perhaps eliminated, leading to a reduction in income of up to several thousand dollars for production employees.

• Managers' salaries will be cut, with top managers facing the largest reductions.

At the same time, the company has decided not to cut hourly pay for production employees.

Honda declined to say how many employees it hopes will accept the buyout offer or how much money it hopes to save. The company also declined to give details about the incentives it will give to employees who wish to resign or retire.

"It's really yet another reflection of the real challenge the industry is facing," said Ed Kim, director of industry analysis for AutoPacific, a research firm based in Tustin, Calif. "The spotlight is obviously on GM and Chrysler, but everybody is struggling right now."

He said buyouts go against Honda's corporate culture, which views employees as long-term partners. He said the decision to reduce employees in this way probably "a last resort."

Honda previously cut production of 175,000 vehicles in North America for the fiscal year that ends this month, which is about 12 percent of output for those plants.

The company has assembly plants in Marysville and East Liberty, along with an engine plant in Anna and a transmission plant in Russells Point, with a total Ohio work force of about 14,000.

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